Reliance Communication (RCom) expects to complete three proposed deals, including a merger with Aircel, by the middle of 2017.
The Anil Ambani-led telecom company agreed to sell a 51% stake in Reliance Infratel, the company’s tower unit, to Canada’s Brookfield Group for Rs 11,000 crore.
The sale of the tower unit and a plan by RCom and Aircel to merge their wireless businesses are expected to be completed by mid-2017. A merger with Sistema Shyam Teleservices is likely to close by the end of March.
“Consolidation is the only way forward in the industry. Reliance Communication is playing an upfront running role in the consolidation of the industry,” said Gurdeep Singh, Co-CEO of RCom.
The Brookfield and Aircel transactions will help RCom reduce debt by 70% by 2018. RCom’s debt stood at Rs 42,800 crore as of December 31.
Litigation involving Aircel won’t have any impact on the merger process, said Punit Garg, head of strategy and regulatory affairs at RCom. “Everything is on track,” he said.
Chennai-based Aircel risks the cancellation of its licences because representatives of its largest shareholder haven’t appeared in connection with a case filed by the Central Bureau of Investigation.
RCom sold 51% of its tower business to Brookfield Group in December. The telecom towers will be demerged into a separate new entity that will be 100% owned and independently managed by the Canadian company.
Source: Economic Times